Payment cards have become the preferred multi-purpose vehicle for delivering a variety of customer conveniences.
Last month, Staples, Framingham, Mass., transitioned the majority of its Easy Rebates reward system from paper checks to branded prepaid cards. The office-supply retailer, working with Dallas-based Parago, had begun testing the use of prepaid cards for rebates in January. Positive results from the test showed that consumers appreciated the convenience of using prepaid cards, so Staples made the decision to convert its Easy Rebates to plastic.
Prepaid cards, which have been a natural alternative to traditional cash, checks, coupons and gift certificates for some time, are gaining traction among retailers for rebates as well. Another growing trend is that payment cards are no longer limited to a single purpose.
For instance, the new L.L. Bean Visa Card that launched July 1 is both a credit card and a loyalty-rewards card. Every time a cardholder uses the card, regardless of where it is used, they earn “coupon dollars” that can be used toward any L.L. Bean purchase.
Additional loyalty benefits apply when the card is used at an L.L. Bean channel. For instance, the new L.L. Bean Visa card offers free shipping on purchases as well as on returns and free monogramming on L.L. Bean merchandise.
To provide the comprehensive rewards program plus charge card, L.L. Bean partnered with Wilmington, Del.-based card-issuer Barclaycard. The Visa card has no annual fee and no limits on earned rewards.
L.L. Bean, Freeport, Maine, also wanted a partner that would share the retailer’s commitment to its home state as well as reinforce the company’s earth-conscious reputation. Barclays recently opened its newest U.S. customer-care center in Wilton, Maine, and if cardholders choose, Barclays will facilitate the donation of the customer’s coupon dollars to the National Park Foundation.
Pay it forward: Another innovative trend is to reward customer loyalty at the beginning of a shopping experience rather than the end. Typically, retailers and consumers connect through a loyalty program at the point of sale, at which time the most a retailer can offer is deductions off the merchandise being purchased or coupons for a future shopping trip.
Portland, Ore.-based Chockstone introduced a “meet-and-greet” loyalty program in 2007. Implemented primarily in the restaurant sector, the application encourages consumers to swipe a payment card or share their phone number as they enter a restaurant.
“This program empowers merchants to know their customers on an individual basis by systematically cataloging what each customer purchases, how frequently they come in, what they spend, what they like—all that shopping history,” explained Chockstone CEO Jeff Lipp.
When customers swipe a loyalty card or enter the phone number associated with their loyalty account, the system not only tells the merchant the customer’s shopping preferences, it can also instantly offer customized incentives based on those preferences.
Seven of Chockstone’s restaurant customers currently use the meet-and-greet service and have noted a significant increase in visits and spending, as much as a 27% average frequency increase from enrolled guests in the past year.
Analysis and reporting is a big part of the meet-and-greet service. “Many customers use the application to test multiple promotions,” explained Lipp. “We can show the ROI on each specific promotion. We work with companies like Brinker and Subway to see if their customers respond more to offers for free items or to additional reward points.”
Casual restaurants under the Dallas-based Brinker International umbrella include Chili’s, On The Border, Maggiano’s and Macaroni Grill.
The meet-and-greet program also has applicability to any retail store or service merchant that caters to individual consumer preferences such as a spa or salon. Lipp told Chain Store Age that Chock-stone has recently begun working with a large retail company that specializes in women’s apparel, but the retailer has not allowed its name to be released.